Brazilian digital bank start-up Nubank (NU), which counts Warren Buffett as an investor, is launching its own cryptocurrency.
Nubank said it will launch the cryptocurrency, called “Nucoin,” in the first half of 2023.
In a news release, the online financial institution said it plans to offer discounts and other perks to incentivize people to invest in its new digital coin.
The Nucoin cryptocurrency is being built on the Polygon network, a so-called “Layer 2” protocol that alleviates congestion on the Ethereum blockchain, where transactions can often be expensive and have long processing times.
Nubank isn’t the first bank to launch its own cryptocurrency. JPMorgan Chase (JPM) in the U.S. has launched its own cryptocurrency, called “JPMCoin,” as a stablecoin that is pegged to the U.S. dollar.
Nucoin’s price will fluctuate based on supply and demand, similar to Bitcoin (BTC) and Ethereum (ETH).
Nubank’s push into crypto comes at a difficult time. The sector is widely viewed to be in the midst of a “crypto winter,” with many digital coins having lost more than half their value this year.
Nubank started in 2013 with a no-fee credit card in Sao Paulo, Brazil. Since then, it has amassed 70 million users across Brazil, Mexico, and Colombia.
Nubank, which went public in 2021, counts famed investor Warren Buffett among its investors. Buffett’s holding company, Berkshire Hathaway (BRK.A / BRK.B), took a $500 million U.S. stake in Nubank in June of last year.
Nubank already offers cryptocurrency trading in a range of tokens, including Bitcoin and Ethereum.
This year, Nubank’s stock has fallen 56% to trade at $4.40 U.S. per share, putting it in penny stock territory. Penny stocks are defined as securities that trade for less than $5 U.S. a share.